Southern Cross makes third application for clearance to acquire Aetna Health, offers to divest assets
Published19 Sep 2000
The Commerce Commission has received a third application from Southern Cross Medical Care Society for clearance to acquire all the shares in Aetna Health (NZ) Limited.
Commission Chair John Belgrave said that last month the Commission declined Southern Cross' first application because of dominance concerns in the medical insurance market.
The second application included an undertaking from Southern Cross that, if the proposal went ahead, it would divest a number of the health insurance policies currently held by Aetna. Mr Belgrave said the Commission declined that second application because it was not satisfied that a divestment undertaking of the kind offered would answer the Commission's dominance concerns.
The third application includes a revised undertaking that, if the proposal went ahead, Southern Cross would divest all of the health insurance policies currently held by Aetna.
The Commerce Act gives the Commission 10 working days in which to make its decision but allows for extension of time if necessary. Working day 10 will be October 2.
The Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market.
Parties can apply for a clearance, which the Commission will grant if it is satisfied that dominance is not acquired or strengthened. A clearance, if granted, protects an acquisition from court action under the Act.
Southern Cross is New Zealand-based and provides health and travel insurance, owns 13 hospitals and is involved in work place injury prevention and claims processing.
Aetna is ultimately wholly owned by United States company Aetna Inc., which is reorganising its international businesses. It provides health insurance, health services to the Health Funding Authority and programmes to manage work place injuries.
